Broemmer v. Abortion Services of Phoenix, Ltd.

• Decision Date: 13 October 1992
• Docket Number: No. CV-91-0322-PR,CV-91-0322-PR
• Parties: , 24 A.L.R.5th 793 Melinda Kay BROEMMER, Plaintiff-Appellant, v. ABORTION SERVICES OF PHOENIX, LTD., an Arizona corporation, Defendant-Appellee.
• Court: Arizona Supreme Court

Page 1013

840 P.2d 1013

173 Ariz. 148, 24 A.L.R.5th 793

Melinda Kay BROEMMER, Plaintiff-Appellant, v. ABORTION SERVICES OF PHOENIX, LTD., an Arizona corporation, Defendant-Appellee.

No. CV-91-0322-PR.

Supreme Court of Arizona, In Banc.

Oct. 13, 1992.

Reconsideration Denied Dec. 1, 1992.

Fogel and Lamber, P.A. by Dennis M. Lamber and Kenneth J. Love and Gage and Mathers, Ltd. by G. David Gage, Phoenix, for plaintiff-appellant.

Snell & Wilmer by Barry D. Halpern, John C. West, Bob J. McCullough, Robert H. Oberbillig, Phoenix, for defendant-appellee Abortion Services of Phoenix.

The Langerman Law Offices by Amy G. Langerman, Phoenix, for amicus curiae Ariz. Trial Lawyers Ass'n.

Bob Gibbons, Austin, Tex., and Jeffrey R. White, Washington, D.C., for amicus curiae Ass'n of Trial Lawyers of America.

Snell & Wilmer by Lawrence F. Winthrop, Phoenix, for amicus curiae Ariz. Medical Ass'n.

MOELLER, Vice Chief Justice.

STATEMENT OF THE CASE

Melinda Kay Broemmer (plaintiff) asks this court to review a court of appeals opinion that held that an "Agreement to Arbitrate" which she signed prior to undergoing a clinical abortion is an enforceable, albeit an adhesive, contract. Broemmer v. Otto, 169 Ariz. 543, 821 P.2d 204 (1991). The opinion affirmed the trial court's grant of summary judgment in favor of Abortion Services of Phoenix and Dr. Otto (defendants). Because we hold the agreement to arbitrate is unenforceable as against plaintiff, we reverse the trial court and vacate in part the court of appeals opinion. We have jurisdiction pursuant to Ariz. Const. art. 6, § 5(3) and A.R.S. § 12-120.24.

FACTS AND PROCEDURAL HISTORY

In December 1986, plaintiff, an Iowa resident, was 21 years old, unmarried, and 16 or 17 weeks pregnant. She was a high school graduate earning less than $100.00 a week and had no medical benefits. The father-to-be insisted that plaintiff have an abortion, but her parents advised against it. Plaintiff's uncontested affidavit describes the time as one of considerable confusion and emotional and physical turmoil for her.

Plaintiff's mother contacted Abortion Services of Phoenix and made an appointment for her daughter for December 29, 1986. During their visit to the clinic that day, plaintiff and her mother expected, but did not receive, information and counselling on alternatives to abortion and the nature of the operation. When plaintiff and her mother arrived at the clinic, plaintiff was escorted into an adjoining room and asked to complete three forms, one of which is the agreement to arbitrate at issue in this case. The agreement to arbitrate included language that "any dispute aris[ing] between the Parties as a result of the fees and/or services" would be settled by binding arbitration and that "any arbitrators appointed by the AAA [American Arbitration Association] shall be licensed medical doctors who specialize in obstetrics/gynecology."

[173 Ariz. 150] The two other documents plaintiff completed at the same time were a 2-page consent-to-operate form and a questionnaire asking for a detailed medical history. Plaintiff completed all three forms in less than 5 minutes and returned them to the front desk. Clinic staff made no attempt to explain the agreement to plaintiff before or after she signed, and did not provide plaintiff with copies of the forms.

After plaintiff returned the forms to the front desk, she was taken into an examination room where pre-operation procedures were performed. She was then instructed to return at 7:00 a.m. the next morning for the termination procedure. Plaintiff returned the following day and Doctor Otto performed the abortion. As a result of the procedure, plaintiff suffered a punctured uterus that required medical treatment.

Plaintiff filed a malpractice complaint in June 1988, approximately 1 1/2 years after the medical procedure. By the time litigation commenced, plaintiff could recall completing and signing the medical history and consent-to-operate forms, but could not recall signing the agreement to arbitrate. Defendants moved to dismiss, contending that the trial court lacked subject matter jurisdiction because arbitration was required. In opposition, plaintiff submitted affidavits that remain uncontroverted. The trial court considered the affidavits, apparently treated the motion to dismiss as one for summary judgment, and granted summary judgment to the defendants. Plaintiff's motion to vacate, quash or set aside the order, or to stay the claim pending arbitration, was denied.

On appeal, the court of appeals held that although the contract was one of adhesion, it was nevertheless enforceable because it did not fall outside plaintiff's reasonable expectations and was not unconscionable. Following the court of appeals opinion, the parties stipulated to dismiss the Ottos from the lawsuit and from this appeal. We granted plaintiff's petition for review.

ISSUE

Plaintiff presents 5 potential issues in her petition for review. Some of the parties and amici have urged us to announce a "bright-line" rule of broad applicability concerning the enforceability of arbitration agreements. Arbitration proceedings are statutorily authorized in Arizona, A.R.S. §§ 12-1501 to -1518, and arbitration plays an important role in dispute resolution, as do other salutary methods of alternative dispute resolution. Important principles of contract law and of freedom of contract are intertwined with questions relating to agreements to utilize alternative methods of dispute resolution. We conclude it would be unwise to accept the invitation to attempt to establish some "bright-line" rule of broad applicability in this case. We will instead resolve the one issue which is dispositive: Under the undisputed facts in this case, is the agreement to arbitrate enforceable against plaintiff? We hold that it is not.

DISCUSSION

I. The Contract is One of Adhesion

When the facts are undisputed, this court is not bound by the trial court's conclusions and may make its own analysis of the facts or legal instruments on which the case turns. Tovrea Land & Cattle Co. v. Linsenmeyer, 100 Ariz. 107, 114, 412 P.2d 47, 51 (1966). A.R.S. § 12-1501 authorizes written agreements to arbitrate and provides that they are "valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract." Thus, the enforceability of the agreement to arbitrate is determined by principles of general contract law. The court of appeals concluded, and we agree, that, under those principles, the contract in this case was one of adhesion.

An adhesion contract is typically a standardized form "offered to consumers of goods and services on essentially a 'take it or leave it' basis without affording the consumer a realistic opportunity to bargain and under such conditions that the consumer cannot obtain the desired product or services except by acquiescing in the form contract." Wheeler v. St. Joseph Hosp., 63 Cal.App.3d 345, 356, 133 Cal.Rptr. 775, 783 The printed form agreement signed by plaintiff in this case possesses all the characteristics of a contract of adhesion. The form is a standardized contract offered to plaintiff on a "take it or leave it" basis. In addition to removing from the courts any potential dispute concerning fees or services, the drafter inserted additional terms potentially advantageous to itself requiring that any arbitrator appointed by the American Arbitration Association be a licensed medical doctor specializing in obstetrics/gynecology. The contract was not negotiated but was, instead, prepared by defendant and presented to plaintiff as a condition of treatment. Staff at the clinic neither explained its terms to plaintiff nor indicated that she was free to refuse to sign the form; they merely represented to plaintiff that she had to complete the three forms. The conditions under which the clinic offered plaintiff the services were on a "take it or leave it" basis, and the terms of service were not negotiable. Applying general contract law to the undisputed facts, the court of appeals correctly held that the contract was one of adhesion.

(1976) (citations omitted); see also Burkons v. Ticor Title Ins. Co. of Cal., 165 Ariz. 299, 311, 798 P.2d 1308, 1320 (App.1989), rev'd on other grounds, 168 Ariz. 345, 813 P.2d 710 (1991) (essence of adhesion contract is that it is offered to consumers on essentially a "take it or leave it" basis). TheWheeler court further stated that "[t]he distinctive feature of a contract of adhesion is that the weaker party has no realistic choice as to its terms." 63 Cal.App.3d at 356, 133 Cal.Rptr. at 783 (citations omitted). Likewise, in Contractual Problems in the Enforcement of Agreements to Arbitrate Medical Malpractice, 58 Va.L.Rev. 947, 988 (1972), Professor Stanley Henderson recognized "the essence of an adhesion contract is that bargaining position and leverage enable one party 'to select and control risks assumed under the contract.' " (quoting Friedrich Kessler, Contracts of Adhesion--Some Thoughts About Freedom of Contract, 43 Colum.L.Rev. 629 (1943)).

II. Reasonable Expectations

Our conclusion that the contract was one of adhesion is not, of itself, determinative of its enforceability. "[A] contract of adhesion is fully enforceable according to its terms [citations omitted] unless certain other factors are present which, under established legal rules--legislative or judicial--operate to render it otherwise." Graham v. Scissor-Tail, Inc., 28 Cal.3d 807, 171 Cal.Rptr. 604, 611, 623 P.2d 165, 172 (1981) (footnotes omitted). To determine whether this contract of adhesion is enforceable, we look to two factors: the reasonable expectations of the adhering party and whether the contract is unconscionable. As the court stated in Graham:

Generally speaking, there are two judicially imposed limitations on the enforcement of adhesion contracts or provisions thereof. The first is that such a contract or...